Posts

to improve your credit

7 Things you can do this year to improve your credit

/in /by

Whether you want to purchase a house or a new car, you need a good credit score to get approved and get a decent interest rate.

There are things you can do to improve your credit score. However, the process takes time because your score shows your money management habits over a several-year span. Here’s what you can do today to improve your score.

things you can do to improve your credit

Pay bills on time

Late or missed payments are a credit score killer. One way to make sure you pay on time is to set up a monthly payment with your bank. Don’t make the mistake to schedule the payment for the day it’s due. Instead, schedule it for a day after you get paid. Otherwise, you risk running short of money when the due date comes.

Alternatively, create a calendar event on your phone. There are plenty of scheduling apps that will remind you of payment due dates. It will only take a minute or two to set it up.

Lower your credit card balances

A major factor in calculating your credit score is the ratio of how much credit you have available versus how much you are actually using. Lenders recommend you to keep a credit utilization rate of 30% or less. Pay down the balance and try to maintain the balances at 30% or less, if possible.

Pay off small balance credit cards

How many cards you have with a balance is also a part of your credit score calculation. If you happen to have quite a few cards, try to pay the ones with a small balance off. It is better to have one or two cards and use them for the major purchases. Furthermore, getting rid of small debts will give you a psychological boost to pay off bigger sums in the future.

Keep old debt on your report

As already mentioned, a report shows how you handle your debt and how financially responsible you are. There is no need to remove a debt from your report (like a car loan you paid off). Leave it on your report to show future creditors that they can trust you with your next loan. Besides, the old debt will be gone from your report in seven years.

Pay attention to your credit score

Get used to checking your credit score regularly. There you can see exactly what needs improvement. Download Credit Sesame to get payment reminders, organize your debt and even get a sample credit score (an estimate, not your exact FICO score).

Negative credit report

Understanding negative reporting is important because negative information not only stays in your report for seven years (ten for bankruptcy), but it also lowers your score. The causes are usually late payments, debt collections, judgments, charge-offs, repossession, foreclosure, tax liens, or even bankruptcy. If you want to settle a debt you cannot pay in full, make sure you understand the full terms of the “re-negotiation”. It is better to pay in a settlement than to declare bankruptcy so make sure you carefully consider all your options.

Bonus tips

There are not many ways in which one can improve their credit score. It is pretty straightforward – do not be late with your payments and the overall score will increase.

Do not take risks

One of the best things to do while trying to better a credit score is to play it safe. Two of the biggest risks for your credit score are missing payments (for which, as mentioned above, an app can help) and suddenly paying less than normally.

Don’t focus on your credit too much

If you just pay everything on time, your score will slowly but surely improve. There are no shortcuts and there is no need to stress out. Be patient and watch your credit score get better month by month.

Know the types of debt

Credit cards are probably the first thing we think of when debt is mentioned. Credit card debt is one of the most common debts, along with student loans, and medical debt. But there are many more consumer debts, like mortgage, car loan, utilities, phone bills, installment plans, services, etc. What all consumer debts share in common is the fact that they are all covered by Fair Debt Collection Practices Act. As the name implies, the act sets some limits for debt collectors and protects certain rights of consumers.

Improving your credit score takes time and persistence, but it is not impossible. The earlier you start taking action, the sooner you will be able to meet your financial goals: getting a mortgage for your dream home, purchasing the dream car or even pursuing educational growth.

ready to buy a house?

Questions you need to ask yourself before buying a house

/in /by

Becoming a homeowner is an important decision and you want to make sure you are ready. Your family situation, your job, and your financial health all dictate when it’s a good time to buy a house.

Are you ready to buy a house?

After answering the following questions, you will have a better understanding of how close you are to reaching the milestone of buying a house.

Part 1: The Idea

The first step is what we call the consideration stage. It’s when you first start figuring out what you want in a house.

  • What house do I want?

If you don’t know what you want, you are not ready to buy a house. The right house does not only depend on the price and location, but on your needs as well. You need to consider yard size, whether or not it has a finished basement, the number of bedrooms and bathrooms, and how much TLC it’s going to need.

  • Am I ready to stick around?

If you are not sure you can commit to staying at your new house for at least the next 5 years, you may want to think twice about purchasing a house.  If you decide to sell the house in less than 3-5 years of purchasing it, it is not worth the investment now. This is because appreciation won’t catch up to the closing costs and you will be losing money.

Part 2: The Means

Here we cover the financial concerns of purchasing a house. If you are not financially prepared yet, these questions should give you the guidelines of what you should be aiming for.

  • Do I have the money?

Of course, you can get a mortgage, but it is best you save up and put down 20% of the selling price upfront to avoid paying private mortgage insurance.

  • Do I have debt?

Your debt-to-income ratio needs to be good in order to qualify for a mortgage. Together with the mortgage your debt can make up to about 36% of your gross income. If it is higher than that, it becomes extremely hard to get a mortgage. Not only that, if you have debt and a mortgage, any sudden reduction in income would make it difficult to keep up with all of your payments and maintain the house properly.

  • How is my credit score?

Credit score is important because it shows the mortgage lender whether you are reliable. More specifically, they will be looking at alternative credit trade lines, which would include rental history, car insurance, utilities, monthly subscription services, and cell phone bills etc. Mortgage lenders are looking for a good score in the last 12 months or more. So, the first step is to make sure you know what your credit score is.

If your credit score is good, you will have lower monthly payments.  In other words, the interest on your mortgage will be lower.

Low or no credit score is not good since lenders are looking for proof that when lend the money you will be responsible and they can trust that you will pay it off.  In this case, you’ll need to put off buying the house and build your credit score first.

  • How are my savings?

Aside from your emergency account, you need to be able to put money in a savings account. If you can put money aside it means you have good income flow as well as spending habits.  In case you cannot put aside anything more than for your mortgage payment, you should postpone the purchase of a house until you have a more secure income or better spending habits.

One thing that you would need is a savings account for the down payment for the house you have chosen.

  • Have I taken into account all the hidden costs?

If the list price seems high wait until you add all the hidden costs. Insurance, property tax, utilities, moving costs, and renovations are just the beginning. The biggest hit perhaps, will come from the maintenance of the house. The larger the house, the bigger these costs will be.

  • Do I have an emergency fund?

You might be the person to plan at least 3 months ahead, but unexpected things happen anywhere, anytime. For example, if you get sick and need to pay medical expenses, which you did not take into account. There are many other things that may require you to veer from your spending plan. These are exactly the situations you need to have an emergency fund for. A good idea is to first build on your emergency fund and then proceed to purchase a house.

Bonus Question!

  • Is now a good time to buy a house?

Check out the market for houses at your desired location. If you are buying the home as an investment you might as well go the extra mile to make sure you are making a good purchase. The idea here is that the value of the property will rise and perhaps in 30 years you will be able to sell it and travel the world? Even if that’s the case, make sure to factor in the cost of interest payments on your mortgage, upgrades to the property and other maintenance.

In brief, buying a house is a process and it does not simply happen overnight. There is a lot to consider. You need to choose the type of the house you want. Depending on the particular house, you need to calculate how much it will cost you to pay for insurance and maintenance. You need to evaluate your current financial situation and see whether you should make it better.

Loan for Students

Smart Strategies to manage your Student Loans

/in /by

Student loan debt can be overwhelming and many people end up paying it off well into their 40-s and 50-s. We have a few strategies to help you manage your loans better.

Understand Your Loans

Many students don’t really understand the terms of their loans and end up overpaying down the road. Know the type of loans you have, the interest rates, balances, and grace periods. You may have Perkins loans, subsidized and unsubsidized Stafford loans or private loans. If you visit your loan servicer’s website, you will be able to see each loan account, balances, interest rates and current repayment plan. Be aware that frequently students have loans managed by 2 or 3 different servicers. Two common servicers are Navient and Great Lakes. If you go to the Department of Education website, you will find help creating a smart repayment plan.

strategies-to-manage-student-loans

Know the Numbers

It is crucial for you to know the precise amount of money you owe if you want to have control over your student loans. Most students end up with multiple loans and sometimes lose track of them before and during repayment. Know how many loans you have, how much you have to pay each month, the interest rates of each loan and the grace periods.

If you are a current student or a recent graduate, ask your financial administrator at School for assistance or visit the National Student Loan Data System website or Clearinghouse Meteor Network website to find out how much you owe. You can also see all of your loans and debt by checking online your credit report at AnnualCreditReport.com.

Accelerate Your Loan Repayment

You can either pay less money for longer time at a high interest rate, or you can pay more money than the minimum for a shorter time with a lower interest rate. Basically, the faster you pay back your loan and the more money you pay each month, the less interest you will have to pay, thus paying less overall and getting out of debt sooner.

Refinancing

A lot of students end up refinancing their federal student loans; however, this means that you will lose your right of using benefits, such as loan forgiveness and income-based repayment plans. If you are interested in refinancing your student loans consider contacting different lenders to compare total repayment amounts and get a complete picture of your options.

SoFi, CommonBond, Citizens Bank and LendKey are decent lenders who offer good interest rates. LaurelRoad has interest rates starting from 2.99% to 6.99%; Earnest has very decent interest rates, too, between 2.57% and 6.39%; CommonBond offers interest rates starting from as little as 2.57% to 7.12%. SoFi and Earnest might even help you get employed if you struggle with finding a job.

Avoid Default

Depending on what school you are attending, your loans may have a grace period of 3 months, 6 months, or more and the same goes for the total repayment period. Despite most students starting a job right after graduation, often times they are stuck under the burden of repaying these student loans.

If you are more than 270 days late with your payments, your loans will go into default, which is going to lead to taking away your social security benefits. Remember that no matter how difficult your financial situation is, you ought to make at least the minimum payments.

Federal Student Loan Consolidation

This gives you the option to merge all of your student loans into one, thus get rid of all the different interest rates, however, bear in mind that you will, indeed, pay one interest rate but it is going to be quite high.

Aim Higher

Firstly, focus on the loans with the highest interest rate because they will add up the most to your overall debt. Afterwards, shift your focus on the second to last debt with the highest interest rate. This may be challenging, but you will save a significant amount of money if you pay off the costlier debts first. Since your interest rate is based on your principal, another smart move would be to pay extra principal because this will lower your interest payment.

Automatic Payments

Once you have started a job and have consistent, reliable income, you can set up your payments to be automatically withdrawn on a monthly basis. This is just a precaution in case your life gets too hectic and busy and you forget to make your payments on time. Another bonus is that you will get a small reduction on your interest rate.

Programs And Forgiveness

Income-based repayment programs allow you to be forgiven from your outstanding loan money after 25 years of regular payment. However, there are certain criteria to be met if you want to use the benefits of IBRP, like the payments you have to make on your federal student loans must exceed 15% of your total earnings above 150% of the poverty level.

Pay As You Earn (PAYE)

This is a good program which will forgive outstanding money on your federal student loan after 20 years of regular payment. To be eligible to use PAYE your payments must exceed 10% of your total income above 150% of the poverty level. There are other criteria which must be met in order to qualify for the program.

Public Service Loan Forgiveness

Certain people can be eligible for PSLF after 10 years of qualifying payments. One of the stipulations is that you must be hired by a non-profit organization, volunteer organization or other public service organization. It is worth doing your own research to see what your chances of benefiting from this program are.

The approximate number of people with student loans in the USA is 40 million with around $1.3 trillion total debt. In 2014 the federal government seized portions from the social security checks of about 135,000 people because their loans went into default. Get educated about your student loan repayment options, pay more than the minimum whenever you can and do whatever is necessary to avoid defaulting on your loans. Don’t worry, you are not alone. There is free student loan counseling available from the Federal Government, from your loan servicer and from most reputable banks. If you feel overwhelmed or fell behind on your payments, contact your servicer as soon as possible. Do not wait. You can get back on track with some timely action.

Auto title loan

Understanding Auto Title Loans

/in /by

An Auto Title Loan is a relatively easy, convenient and fast way to get money for unexpected expenses or to cover bills when your finances are tight. There aren’t tons of requirements or terms and conditions to remember when you take a title loan, but it’s still important to understand the title loan basics.

UNDERSTANDING AUTO TITLE LOANS

OWN A VEHICLE: Obviously, this is the most important aspect of auto title loans to remember when you consider applying. Moreover, your vehicle should fit in one of the following categories: car, RV, motorcycle, watercraft, trailer, truck, or boat.

You will be asked to provide proof that you are the legal owner of your vehicle. Since title loans don’t have extensive eligibility requirements, your vehicle is a guarantee that you will pay off the money.

BE FAMILIAR WITH YOUR VEHICLE: Not only will you have to be the legal owner of your car but also you need to know the exact equity of it, as well as its make, year, model, and approximate mileage. It is important for the lender to know the year and model of your car because the loan your lender will give you will be based on the equity of your vehicle. Another important thing to keep in mind is that your car must be in a decent condition in order to qualify as collateral for your loan.

RESIDENCY OR CITIZENSHIP: California residents can get fast and easy cash online in as little as 30 minutes. You will have to be citizen or resident in the USA and be at least 18 years old to qualify for an auto title loan.

HOW TO APPLY: You can apply in person, by phone or online. You won’t have to go to a bank and wait for hours. You will be handed your money in cash in approximately 30 minutes!

At Fast Money Loan, we have offices throughout California, so you can meet our representatives in person and they will answer any questions for you. We have locations in Long Beach CA, LA County, Orange County & San Diego County. A qualified loan advisor will assist you throughout the application process.

FEES AND INTEREST: We offer annual percentage rate (APR) as low as 17% with the maximum of 33.42% APR for the Diamond Express Loan. You can pre-pay your loan at any time because we don’t have pre-payment penalty and we don’t oblige you with a minimum payment period. The administration fee, however, is non-refundable and customers will be asked to show a minimum of 620 FICO score. In addition, there might be DMV Lien Transfer fee and a single processing fee.

SHORT-TERM: Unlike other loans that take 5 or even up to 20 years to pay off, our title loans are usually short-term and they are used by people who need fast and easy money for medical emergencies, unexpected personal expenses, or money due for a rent when you know that within the next 30 days you will find the money to pay off your loan.

KEEP DRIVING YOUR CAR: After you have applied for an auto title loan and have received the money in cash, you will be able to keep driving your vehicle.

In order to get auto title loan, however, you will be asked to give the title of your car to the lender until you have paid the full amount of the loan you have taken. This is our security measure to make sure you will pay off the loan.

PAPERWORK: You won’t be asked to provide tons of paperwork and there would be no need to pull your full credit report as long as you show a FICO score of 620. Even if your credit score is low and you have outstanding payments all this won’t affect your application for auto title loan. If you are currently paying off your vehicle, we will still give you a loan and help you pay off your vehicle debt as a bonus to your new loan. Furthermore, you will be granted a loan even if you have recently lost your job but show an ability to repay the loan!

In 2016 the number of people who had taken out personal loans only was roughly 83 million. The top 10 reasons why people take out loans are for tuition fees, business, paying rent, personal expenses, vehicle expenses, consolidate debt, medical expenses and emergencies, bills, moving expenses, and vacations. If you are in urgent need of cash you can use our easy, fast and convenient services!

How to Check Your Credit Score and Credit Report

/in /by

Up to 80% of Americans use credit, yet many don’t realize the importance of their credit score and do nothing to increase it. Some people don’t have a high score because they have never taken a loan and usually these are people in their early 20s. Many Millennials use student loans, but their credit score tends to be below average, making it difficult to obtain a loan later in life.

Interestingly, 6 in 10 Americans have no clue what their credit score is and don’t understand the role it plays as an indicator of their financial health. Here’s how you can check your credit score and get a credit report.

Know your credit score

There are four credit score tiers:

How to check Credit Score & Credit Report

  • Poor Score: 400-549
  • Fair Score: 550-649
  • Good Score: 650-700
  • Great Score: 701-850

If you want to find out which of these four grades you fall in, there are three ways to do it:

  • Check it online: If you are curious about your credit score, you can easily check it online for free. You can also obtain your full credit report for free as it is a federal law that you are able to access it annually. An account with CreditKarma.com is free and will give you access to your consumer credit score, allow you to track your score, send you instant updates and notifications when a new account is opened or when you apply for credit. It is a great way to keep an eye on suspicious activity and avoid becoming a victim of identity theft. www.AnnualCreditReport.com allows you to download your credit reports from all 3 credit agencies once a year. AnnualCreditReport.com does not offer you a free credit score – that comes as part of their paid credit monitoring program.
  • Consult the 3 Credit Bureaus: You can get your credit reports directly from Experian, Equifax and TransUnion, but, again, you’ll have to pay for your credit score. You can either get all 3 of your credit reports once a year or request them one by one every four months. Note that these bureaus are completely separate and you will need to pull your reports individually.
  • Ask your bank: Fair Isaac Co can pull your credit report, but keep in mind that it is not free of charge. Make sure you go to your bank and ask them if they can pull your reports for free – most banks started offering this service to their clients. Among these banks are Discover, Barclays, Citi, Chase, Bank of America, Ally, Capital One and Wells Fargo.

Check the accuracy of your credit score and report

Your credit report is the key to accessing credit cards, loans, renting and buying property, getting lower interest rates, receiving job offers, and more. Make sure you review all the information provided in the reports you pulled because data shows that 1 in 20 people have credit report errors which drastically change their credit score.

Take a close look at your name, address, accounts, and payments. Review your reports for errors, like foreign accounts; unauthorized loans; someone else’s collections; late payments which you, indeed, paid on time; and debts that are not yours. These could mean that you were a victim of identity theft and can ruin your credit history.

If you detected errors in your credit report, contact all 3 credit bureaus right away and have them corrected. It is your right to file a dispute and some bureaus offer easy and convenient way for you to get that job done. It can be as easy assending a letter where you thoroughly explain the issue and attach proof of errors.

Your proof can be a document or a letter, payment records, receipts, monthly payment statements and anything else that can show what actually took place. Keep in mind that you must keep all correspondence with bureaus and banks. In addition, you need to have a tracking number for your mail in case it gets lost. File your dispute right after you notice the errors because sometimes a dispute can take up to 45 days to be processed.

Know the difference between credit score and credit report

An important thing to remember is that credit score and credit report are two completely different things. Your credit report is a complete history and record of your use of credit, like credit cards, student loans, car title loans, and credit amounts. Your credit score is a creditworthiness grade you are given based on a calculation by a credit bureau. This calculation is based on how much debt you have, your payment history, accounts in collections, credit card use and more.

In other words, if your credit report looks good your credit score will be good as well and vice versa. Your score can affect your future plans for renting your dream apartment in downtown Long Beach, for example.

A good credit score is crucial especially for those who sooner or later will need to invest in their first apartment or house, a car or a small business. Reaching that high score is important if you want better interest rates for your mortgage, or if you want a car, insurance, credit card offers, and other benefits. If you have a good credit score you will have better loan terms, higher chances for credit approval, and less payments to make.